Thursday, February 28, 2008

The subtitle of The Goal is “A process of ongoing improvement”. Over the last 25 years, Dr. Goldratt has further developed the Theory of Constraints (TOC) as a holistic process to quickly and substantially improve business results. It is very compatible with Lean and Six Sigma, the two other widely known business improvement processes, where TOC is used to determine where to focus Lean (reduce waste) and Six Sigma (reduce variation) tools.

So why is TOC not more well-known and practiced if The Goal is so well read and results from implementing its methods are so effective? And why are Lean and Six Sigma much more popular business improvement processes? This is a hot topic amongst TOC experts, and probably has to do with the fact that TOC challenges most conventional practices.

For example, TOC contends that Cost Accounting is invalid. Are you prepared to consider for even a moment that the concepts of Economic Order Quantity (EOQ) and set-up cost are incorrect? And if you are, are you prepared to learn the concepts of the alternative, Throughput Accounting? For the few people that are willing to, the rewards are enormous, but most people will resist that change.

Tuesday, February 26, 2008

Do you remember Herbie from the book “The Goal”? He was the slowest Boy Scout on the hike. The hike was taking much longer than expected, and the only way the troop could finish the hike sooner was to find a way to make Herbie go faster. The troop put Herbie at the front of the line, distributed the contents of his backpack and finished the hike at a much faster rate.

Of course, the hike was an analogy for improving a business, and made the point that is always someone or some thing is restricting the business from achieving more of its goal. For a business, that goal is usually “to make more money now and in the future”. If your business is not making an infinite amount of net profit, someone or some thing is holding you back. Do you know what it is?

The Goal was written 25 years ago, yet it is still a best seller worldwide. It is estimated that 20% of business people have read it, more than any other business book. For every copy bought, an estimated 4 people have read it due to it being recommended and passed on. Over 5% of businesses worldwide have implemented some of the common sense methods described in The Goal with significant results*:

Saturday, February 23, 2008

The best selling business book in the world was made into a movie. The DVD typically sells for $895. However, until February 29 you can purchase it for $447.50. The video is a great way to introduce the concepts in The Goal to your entire staff in just 55 minutes.

This video takes The Goal book and shows you how to put the theories to work in your company.Based on the best-selling book by Eli Goldratt, The Goal tells the story of Alex Rogo, a plant manager facing the threat of his plant's closure. The video follows Alex and his team as they use the Theory of Constraints to transform their mediocre division.

The first obstacle standing in the way of implementing a major change is reaching a wall-to-wall agreement on the direction of change. A powerful tool that can be used to create such agreement is "The Goal: The How-To Version” video. The use of this video is not limited just to the beginning of the implementation process. Reaching agreement on the change in direction is not a one-time effort. As the company moves in a new direction there will be some unavoidable diffusion. To prevent too much diffusion there is the need to repeatedly realign interpretations and periodically use the movie.

If you're interested in purchasing send me an email. The video also comes in Spanish and in PAL format which may be of interest if you're outside the US.

A Mafia Offer is the key to exploiting a market constraint or sales constraint. It could also be called an unrefuseable offer, an irristible offer, a market offer, a touchstone, a competitive advantage, a value proposition, or a unique selling proposition.

However, when most people are talking about a touchstone, a competitive advantage, a value proposition, or a unique selling proposition (USP) these are actually quite different from a Mafia Offer. They basically take what you already do and state it succinctly and with more specificity. A Mafia Offer typically requires that you do something different to actually deliver something unrefuseable to your customers and something that your competition can't or won't do because they are not willing to or don't know how to make the change.

In this way, a Mafia Offer is a longer lasting competitive advanatage instead of just a positioning.